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5. The following ratios have been calculated for Peters Company for 2002. Profit margin 20% Interest coverage 12 times Receivables turnover 5 times Acid test ratio 1.4:1 Current ratio 2.5:1 Debt to total assets 24% The 2002 financial statements for Peters Company with missing information follows: PETERS COMPANY Comparative Balance Sheet December 31, Assets 2002 2001 Cash ...................................... $ 25,000 $ 35,000 Temporary investments ..................... 15,000 15,000 Accounts receivable (net) ................. ? (6) 50,000 Inventory ................................. ? (8) 50,000 Property, plant, and equipment (net) ...... 200,000 160,000 Total assets ............................ $ ? (9) $310,000

Liabilities and shareholders' equity Accounts payable .......................... $ ? (7) $ 25,000 Short-term notes payable .................. 35,000 30,000 Bonds payable ............................. ? (10) 20,000 Common shares ............................. 200,000 200,000 Retained earnings ......................... 47,000 35,000 Total liabilities and shareholders' equity $ ? (11) $310,000

PETERS COMPANY Income Statement For the Year Ended December 31, 2002 Net sales .................................. $200,000 Cost of goods sold ......................... 100,000 Gross profit 100,000 Expenses: Amortization expense ..................... $ ? (5) Interest expense ......................... 5,000 Selling expenses ......................... 10,000 Administrative expenses .................. 15,000 Total expenses ......................... ? (4) Income before income taxes ................. ? (2) Income tax expense ....................... ? (3) Net income ................................. $ ? (1)

INSTRUCTIONS Use the above ratios and information from Peters Company financial statements to fill in the missing information on the financial statements. Follow the sequence indicated. Show calculations which support your answers.